Speaking at the Center for American Progress on May 16, House Minority Leader Nancy Pelosi (D-Calif.) falsely claimed 7 million veterans would lose their tax credits under the Republican health-care bill. (The Washington Post)

“Seven million veterans will lose their tax credit for their families in this bill.”— House Minority Leader Nancy Pelosi (D-Calif.), remarks at the Center for American Progress “Ideas Conference,” May 16, 2017

While listing a series of criticisms of the House Republican bill to overhaul the Affordable Care Act, Pelosi described it as “Robin Hood in reverse” that hurts those in need, such as veterans.

In its earlier iteration, the American Health Care Act (AHCA) contained a provision protecting tax credits for veterans, regardless of whether or not they were enrolled in the Department of Veterans Affairs health-care system. The version of the bill that was passed in May omitted this provision, meaning some veterans may no longer have access to subsidized private insurance.

But Pelosi glossed over the nuances of this issue in her claim, so we dug into it.

The Facts

Under the Affordable Care Act, or Obamacare, premium tax credits help make health insurance more affordable. In general, this premium is not available for people who otherwise are eligible to enroll in other “minimum essential coverage,” like government-sponsored health care. (For veterans, that would include VA health care.)

But veterans’ health care is unique. For example, not all veterans qualify for VA care, and not all veterans who are eligible for VA care actually enroll.

So the Internal Revenue Service and the Treasury Department came up with a regulation to make an exemption, allowing veterans and their dependents to choose whether to get VA coverage or enroll in coverage through the Obamacare exchange. They can choose to be on the exchange, and receive premium tax credits for it, even if they are eligible for VA care. As our friends at PolitiFact noted, the number of uninsured veterans declined significantly after Obamacare took effect.

The Republican replacement bill initially contained this provision. But it was removed in the version that ultimately passed the House, in order to help its chances of moving through the Senate using a parliamentary procedure that would require no Democratic votes.

Proponents of the bill say that nothing will change for veterans. The legislation “makes no changes to veterans’ health care. Unless they are specifically enrolled in and receiving insurance through the VA, they are eligible for our tax credit,” House Ways and Means Committee spokeswoman Lauren Aronson said.

But Pelosi’s staff says it’s not so definitive. The replacement bill strikes language in current law that applies to the veteran tax credit with no mandate to reissue the existing IRS regulation, so that means the Treasury Department and IRS need to come up with new regulations to add the protection for veterans, they said.

Lisa Zarlenga, attorney at Steptoe & Johnson who was the tax legislative counsel for the Treasury Department when Obamacare went into effect, agreed that a new regulation would need to be issued for the new health law. But she added that the agencies could ultimately decide to use the same language in the current regulation that exists under Obamacare.

Because the provision wasn’t included in the bill itself, the House Ways and Means Committee is now trying to get the current IRS regulation to become law. A key Republican on the committee, Rep. Sam Johnson (R-Tex.), introduced a separate bill to add a “belts and suspenders” level of protection for premium tax credits for veterans.

This means veterans “could” — not “will,” as Pelosi says — lose tax credits if the current protections don’t carry over under a new health law.

Would it affect 7 million veterans and their families? Not necessarily.

But that 7 million figure also includes people who have other forms of health insurance (for example, Medicaid or through their employer) and therefore are already not eligible to receive a premium tax credit — regardless of whether they’re eligible for VA health care.

The exact number is not readily available. We checked with several veterans’ groups and the VA, but there was no specific figure. One reason is that VA health care eligibility is constantly being adjusted, said Dan Caldwell, director of policy for the conservative Concerned Veterans for America: “It is likely that a large portion of that 7 million veteran population have employer-provided insurance or other coverage which would exclude them from getting a tax credit regardless of whether they are eligible for VA health care.”

The Pinocchio Test

Pelosi states in broad, certain terms that 7 million veterans will lose premium tax credits for themselves and their dependents under the Republican plan to overhaul Obamacare. But in reality, it’s not so certain. Republicans have stressed that they want current protections to remain, even if Obamacare is repealed; it’s an issue only because of the parliamentary tactics they have chosen. They’re now taking steps to turn the current IRS protections into law.

And even if current regulations don’t carry over, the universe of people affected by this change likely is not the full 7 million. There already are people within that 7 million population who don’t qualify for the tax credit because they have another form of insurance.

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